Internal Revenue Bulletin:
2007-9

February 26, 2007

INCOME TAX

LIFO; price indexes; department stores. The
December 2006 Bureau of Labor Statistics price indexes are accepted for use
by department stores employing the retail inventory and last-in, first-out
inventory methods for valuing inventories for tax years ended on, or with
reference to, December 31, 2006.

Proposed regulations under section 6325 of the Code outline specific
procedures for obtaining a release of a federal tax lien or a discharge of
a federal tax lien from property to which it has attached. The regulations
incorporate changes to the Code that were made by the IRS Restructuring and
Reform Act of 1998, which afford a means for a person whose property is encumbered
by a federal tax lien, but who does not owe the tax giving rise to the lien,
to have his property discharged from the lien.

Donor advised funds and supporting organizations. This
notice requests public comments in connection with a study being conducted
by the Department of the Treasury and the Service on the organization and
operation of donor advised funds and supporting organizations. The study is
required by section 1226 of the Pension Protection Act of 2006.

This announcement sets forth a compliance resolution program (Program)
that permits employers to pay the additional section 409A taxes arising due
to the exercise of certain stock options and stock appreciation rights (stock
rights). The Program (1) applies only to discounted stock rights exercised
during 2006, (2) applies only to certain employees and former employees who
are not corporate insiders, and were not corporate insiders at the date of
grant of the stock right, (3) requires the employer’s full payment of
the section 409A taxes, (4) provides relief for the employees from the requirement
to pay these taxes, and (5) requires treatment of the employer’s payment
of the employee’s section 409A taxes as an additional payment of compensation.
Employers wishing to participate in the Program must notify the IRS no later
than February 28, 2007, and must notify affected employees within 15 days
of notifying the IRS.